6 ways to safeguard your assets in long-term care planning

On Behalf of | Dec 12, 2023 | Asset Protection Planning |

According to SeniorLiving.org, assisted living facilities in New Jersey cost residents $2,008 to $9,300 per month. When planning for your future living situation, paying for long-term care while preserving your wealth becomes an important consideration.

There are several strategies you can use to prevent financial losses during this time.

1. Understand eligibility criteria for Medicaid

Medicaid can provide financial assistance for long-term care. However, you must meet the following types of eligibility criteria:

  • Assets and income
  • Functional and medical needs for care
  • Citizenship and residency
  • Spousal protections

Structuring your assets to meet Medicaid requirements can help you access this support while protecting your wealth.

2. Secure your estate with asset protection trusts

Asset protection trusts are legal instruments designed to shield your assets from covering long-term care costs. By placing your assets into such trusts, you keep control over their use while safeguarding them from depletion due to healthcare expenses.

3. Set up irrevocable trusts for the long-term

Irrevocable trusts are another option for protecting your wealth during long-term care planning. Once established, no one can alter or revoke these trusts without the consent of the named beneficiaries, providing a level of security for your assets.

4. Reduce tax liability with lifetime gifting

Consider gifting assets during your lifetime to reduce the value of your estate. By gifting strategically, you may lower potential tax liabilities and ensure that you preserve more of your wealth for your benefit and the benefit of your heirs.

5. Plan ahead with long-term care insurance

Investing in long-term care insurance is a proactive approach to managing future healthcare costs. This type of insurance can cover expenses associated with assisted living, preserving your wealth for other needs or passing it on to your family.

6. Consider spousal impoverishment protections

If one spouse requires long-term care while the other remains in the community, spousal impoverishment protections come into play. These regulations aim to ensure that the community spouse has adequate resources for living expenses, helping to protect the financial well-being of both partners.

It is important to start planning as soon as possible. A well-thought-out strategy can help you secure the care you need while preserving your financial legacy.

FindLaw Network

RSS Feed